Using tools now included in the Air Force Smart Operations for the 21st Century initiative, the Air Force Security Assistance Center was able to return nearly $100 million to foreign military sales customers.

By Daryl Mayer / Air Force Security Assistance Center Public Affairs

WRIGHT-PATTERSON AIR FORCE BASE, Ohio , Mar. 14, 2006 – Using tools now included in the Air Force Smart Operations for the 21st Century initiative, the Air Force Security Assistance Center was able to return nearly $100 million to foreign military sales customers.

Although center customers were the primary beneficiaries in terms of cash, those involved in the process say the gains in production and efficiency have made the center richer as well.

As the manager of the Air Force's $101 billion foreign military sales portfolio, the Air Force Security Assistance Center plays a vital role in maintaining the global balance of power by promoting security and stability with friendly nations.

"The foreign military sales case closure project became our premier project as we were able to not only improve the parts of the process under our center's control, but we were able to influence outside organizations as well."

Stan Zavist, Transformation Division chief

Because of the way foreign military sales cases are funded, the majority of the center's operating budget is linked to sales, and thus the center is especially reliant on its customers.

Because of the center's geographic proximity to General Electric, which has done much of the pioneering work on Six Sigma, the center's leadership decided a little more than two years ago to take advantage of local resources, said Stan Zavist, who is now the Air Force Security Assistance Center Transformation Division chief.

Training was started and soon the center had 4 Six Sigma Green Belts and Zavist became the center's Six Sigma Black Belt.

"The foreign military sales case closure project became our premier project as we were able to not only improve the parts of the process under our center's control, but we were able to influence outside organizations as well," Zavist said.

When a country makes a request through the foreign military sales process, a case is opened, said Cheryl Sandberg, Air Force Security Assistance Center Financial Management director.

When the sale is transacted, the case has to be reconciled before it can be closed. Once reconciliation is complete, the customer frequently receives a refund of any excess money.

Unfortunately, the reconciliation process was notorious for taking quite a while to complete.

So much so, that the Defense Security Cooperation Agency had improving case closure efficiency listed as its top priority.

"It was one of our biggest customer complaints," Sandberg said. "Some cases involved large sums of money and were more than 10 years old."

As long as the case was open, the funds attached to it were left in a sort of limbo.

Seeing the opportunity to put Six Sigma to the test, the center assembled a team led by Sandberg, herself a Six Sigma Green Belt, to examine the problem.

"One of the keys to the success of this project was the inclusion of representatives from Defense Finance and Accounting Service on the improvement team," Zavist said.

"We met with the Chief of Quality for Defense Finance and Accounting Service and explained our goal. We then provided a Six Sigma orientation to the Defense Finance and Accounting Service Dayton Director and staff," he further noted.

Defense Finance and Accounting Service has now trained folks to be Green and Black Belts.

"No one had ever mapped this complex process end to end," Zavist said. "Portions were flow charted by different organizations, but no one ever mapped the big picture before."

Once that task was completed, the Failure Mode and Effects Analysis allowed the team to hone in on the key problems.

In mapping the process, the team identified six different organizations – and even more offices within those organizations – that touched the process. On paper, the effects were startling.

"You took one look at it and you knew why there were problems," Sandberg said.

Over the ensuing months, the team began streamlining and fixing the glitches. In some instances, such as sending paperwork to the proper office, the fixes were simple. Others proved to be more complex.

As the process began flowing more smoothly, the case closure rate picked up steam. Soon, even the most egregious offenders were closed.

When the project began, approximately 40 percent of the case financial analysts time was spent reconciling cases after they were supply complete and only 22 percent of these cases were closed within the required 2-year period.

Today, analysts spend approximately 20 percent of their time reconciling cases, leaving the remainder of their time performing proactive financial analysis during the execution of the case.

Seventy percent of supply complete cases are closed within the 2-year time period. Looking back over the books, the results show more than $92 million was refunded to customers.

"We made a good start, but as with all continuous improvement efforts, it is only a start," Sandberg said. "We'd like to eventually see over 90 percent of our cases completed on time."

Next on the division's scope is to take advantage of the Six Sigma experience and combine it with other tools of the Air Force Smart Operations for the 21st Century initiative, such as Lean, on other projects.

"Our previous experience with Six Sigma leaves us well postured for the Air Force Smart Operations for the 21st Century initiative," Zavist said. "We need to revisit some of the processes that we used Six Sigma on and now apply Lean. In the future, we will Lean first. These two methodologies complement each other quite well."